Fraport Interim Report – First Quarter 2016: Fraport Starts Off the Year with Mixed Financial Results

04.05.2016

ANR 16/2016

FRA/gk-rap - In the first quarter of 2016, some 13 million passengers passed through Frankfurt Airport (FRA), representing an increase of 3.3 percent year-on-year. On the back of that growth, Fraport achieved higher revenue from airport and infrastructure charges as well as from aircraft handling. Simultaneously, net retail revenue per passenger declined from €3.93 to €3.62 on the previous year. One reason was the non-recurrence of particularly high income gained in the first quarter of 2015, when the cap on the Swiss franc's euro exchange rate was removed. Other reasons included a changed passenger structure and a decline in the average retail spending of Chinese and Russian passengers, reflecting the loss of purchasing power of their respective currencies.

Outside Frankfurt, the Group's subsidiaries - particularly in Lima and Ljubljana as well as Twin Star and AMU Holdings Inc. - contributed positively to Fraport's overall revenue performance. While the airports in Ljubljana (Slovenia), Varna and Burgas (Bulgaria), Xi'an (China), Hanover (Germany), and Lima (Peru) partially recorded strong traffic growth, passenger figures at the airports in Antalya (Turkey) and St. Petersburg (Russia) declined in line with expectations.

Adjusted Group revenue rose by €14.7 million (up 2.6 percent) to €572.5 million in the first quarter of 2016. The Group's operating result or EBITDA (earnings before interest, tax, depreciation and amortization) declined by 4.9 percent to €145.6 million in the first quarter, due to higher expenditure resulting from, among other things, collective wage agreements and non-capitalizable investments made at FRA. In contrast, the Group's financial result improved from minus €56.4 million to minus €42.5 million, due to lower interest expenses and lower losses related to currency exchange rates. This led to an overall positive performance of the Group result, soaring by €4.5 million (or 42.5 percent) to €15.1 million year-on-year. Correspondingly, earnings per share rose by €0.05 to €0.16 - an increase of 45.5 percent.

With operating cash flow on the decline, free cash flow - while remaining in positive territory - also shrank by 30.7 percent, from €65.2 million in the previous year to €45.2 million in the first quarter of 2016. Net financial liabilities amounted to approximately €2.75 billion in the first quarter, while the gearing ratio reached 82.8 percent (compared to €2.77 billion and 83.8 percent respectively as of December 31, 2015).

In view of the results achieved in the first quarter of 2016, Fraport AG's executive board is maintaining its outlook for the Group's asset, financial, and earnings position in business year 2016. However, executive board chairman Dr. Stefan Schulte pointed out that the year 2016 will bring about a number of challenges for the aviation industry and thus also for Fraport AG: 'Metaphorically speaking, we are currently maneuvering in a stormy sea. The geopolitical situation is impacting air traffic in Russia and Turkey - where we hold major airport investments - and tourism flows in general. The summer season will show the direction in which our business will develop in 2016.'

Fraport AG's interim report for the first quarter of 2016 is available via our corporate website under Investor Relations.